National carrier Kenya Airways (KQ) reported a loss of 5.66 billion shillings in the year to end March on Friday due to fuel hedge costs, after a revised pre-tax profit of 6.52 billion a year earlier.
The airline's Finance Director Alex Mbugua blamed the performance on the collapse of the oil price: "In September 2008, all hell broke loose, it fell like the Titanic."
One of Africa's leading carriers, Kenya Airways has a fuel hedge policy where it has fixed the price it will buy jet fuel until December 2010.
During the year to March, it reported a loss of 1.37 billion shillings from fuel derivatives after a 1.89 billion gain the previous year. It also included an unrealised fuel hedging loss of 7.5 billion for the period to the end of next year.
Kenya's post-election violence in the first quarter of 2008, last year's high oil prices and the effects of the global downturn also contributed to the loss.
Despite the difficult climate passenger traffic rose 2.3 percent, with strong growth of 15.7 percent in West and Central Africa. Passenger yields were up 6 percent.
The carrier declared a dividend of 1 shilling from its cash reserves, he told an investment briefing.
Like other airlines across the world, Kenya Airways was hit hard by last year's record high prices of crude oil, which peaked at $147 per barrel in July, before retreating this year on the global financial crisis.